The provisions of the Companies Act, 2013 and the rules thereon pertaining to corporate social responsibility (CSR) have been notified yesterday. They will take effect from April 1, 2014. A copy of the rules as notified is available here. As for the specific CSR activities, Schedule VII of the Companies Act containing the list of permitted activities has been amended. While we will have occasion...
Draft Rules under the Companies Act; CSR
The Ministry of Corporate Affairs, Government of India (MCA) has published a set of draft rules required to make the Companies Act, 2013 operational. This first set has been posted on the MCA website. Comments are due on October 8, 2013. This post briefly considers the draft Corporate Social Responsibility Rules issued under section 135 of the Companies Act, 2013. In a previous post, we had set...
CSR and Global Supply Chains
The tragic building collapse in Bangladesh has brought to the fore corporate social responsibility (CSR) issues involving global supply chains as the building is said to have housed factories employing workers manufacturing apparel for well-known global brands. Apart from the focus on local regulations and their enforcement in Bangladesh, the spotlight is now also thrown on the role of the...
Theorizing Companies and Shareholder Interests
The two previous issues of the Economist magazine cover different aspects of the functioning of companies and the impact they have on shareholder value and other aspects of society. One set of issues (discussed here and here) deals with the increase in activism among shareholders. While activist shareholders are making their impact felt in companies around the world, there is a question regarding...
CSR in Public Sector Enterprises
The provisions relating to corporate social responsibility (CSR) in the Companies Bill, 2011 have garnered sufficient attention on the topic. Those provisions are largely in the nature of CSR spending. While the Bill is pending in Parliament, the Department of Public Enterprises has proceeded to issue a revised set of “Guidelines on Corporate Social Responsibility and Sustainability for Central...
Companies Bill Back on the Anvil
In July this year, the Standing Committee on Finance presented its report on the Companies Bill, 2011 suggesting some changes. The recommendations of the Committee have been discussed here. After taking into account the Standing Committee’s views, the Cabinet yesterday approved certain amendments to the Bill, which have been set out in a press release (accessible on the PIB website). From the...
Business Responsibility Reporting
The debate continues over the nature of the corporate social responsibility (CSR) requirements that should be imposed on Indian companies through the Companies Bill, 2011, i.e. whether voluntary or mandatory. Although the Government had proposed a hybrid approach, the Parliamentary Standing Committee on Finance appears to be keen on retaining the mandatory approach, as we had previously discussed...
Standing Committee Report on the Companies Bill, 2011
After the Companies Bill, 2011 was presented in Parliament late last year, it was referred to the Standing Committee on Finance chaired by Mr. Yashwant Sinha. The Standing Committee had previously submitted a detailed report on the Companies Bill, 2009, and most of its recommendations had found their way into the 2011 version of the Bill. The Standing Committee has now issued its report on this...
Paper on CSR in India
While the Companies Bill, 2011 is still pending in Parliament, the provision on corporate social responsibility (CSR) spending continues to be one of the contentious issues. It is not clear what form that provision will take during the next round of the lawmaking process. The oddity of the CSR proposal in the Indian context is its mandatory nature, which has been somewhat diluted in the 2011 Bill...
More on CSR and the Companies Bill
We had earlier discussed the half-way house approach adopted by the Companies Bill, 2011 regarding corporate social responsibility (CSR), whereby CSR spending was not intended to be mandatory, but disclosure thereof was. It appears that there is continued resistance to this approach, and that the Parliamentary Standing Committee reviewing the Bill proposes to look at this issue afresh with a view...
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